What is a Certificate Holder?
A Certificate Holder is the person or organization to whom the certificate is being provided as evidence of insurance. In the commercial real estate space, the Certificate Holder is typically required to be the landlord, property manager, or both.
A COI’s Certificate Holder usually appears at the bottom left of the certificate in the designated Certificate Holder box, but if the broker runs out of space there, she may also note the Certificate Holder in the Description of Operations or on an Additional Remarks page.
It’s important to note that a Certificate Holder does not necessarily have any access to the rights and benefits of an insurance policy. Being listed as a Certificate Holder does not come with any protection from claims.
A Certificate Holder only has the right to be informed. The broker may mail a copy of the certificate to the Certificate Holder’s address, if requested. The Certificate Holder may also receive 30 days’ advance written notice if the policyholder decides to cancel the policy at any time, but only if such a provision is contained within the insurance policy or an accompanying endorsement.
Certificate Holder vs. Additional Insured: What’s the difference?
A very common and expensive mistake we see risk managers, property managers, and contractors make is confusing the meaning of Certificate Holder with Named Insured and Additional Insured.
Note that, from a liability perspective, they are not interchangeable, and knowing the difference is crucial. The Named Insured (a.k.a. the policyholder) is the primary beneficiary of the insurance policy with full rights to its coverage, regardless of whose negligence causes the claim. Likewise, whenever liability arises from collaborating with the Named Insured, Additional Insureds, too, may claim benefits.
The Certificate Holder, meanwhile, is not entitled to any benefits under any circumstances. Listing a Certificate Holder is, above all, an administrative formality without legal implications. Only if the Certificate Holder is also listed as an additional insured can it then be eligible for protection under the policies in question.